Providence, Rhode Island – United Natural Foods, Inc. (Nasdaq: UNFI) (the “Company”) today announced that it has signed a three-year distribution agreement with Safeway Inc. (NYSE: SWY) (“Safeway”). A brief transition period from Safeway’s current distributors is expected, which will coincide with the termination of the current distributors’ distribution agreements. The Company will assume distribution to all of Safeway’s banners in the United States for non-proprietary natural, organic and specialty products effective October 2011. The Company anticipates incremental annual volume from this contract will increase annual revenues by approximately 4% in fiscal 2012.
“We are pleased to establish a distribution relationship with Safeway and are excited about the opportunities this agreement provides,” commented Sean Griffin, Senior Vice President, National Distribution of the Company. “Our ability to continue to gain market share reflects the ongoing efforts by all of our associates to service our customers’ needs and further strengthens our position as the nation’s leading distributor of natural, organic and specialty products. We are in the process of finalizing a transition plan with Safeway in order to provide them with excellent service levels and support, while ensuring there are no disruptions to any of our existing customers.”
“We are looking forward to our new partnership with UNFI to provide the variety of specialty, natural, organic, and regionally relevant products that will meet our customers’ needs,” said Kelly Griffith, Safeway’s President of Merchandising.
The Company will incur approximately $1.5 million – $2.5 million in total start-up expenses during the fourth quarter of fiscal 2011 and the first quarter of fiscal 2012 to transition this business. It is anticipated that approximately $0.5 million to $1.0 million in costs will occur in the fourth quarter of fiscal 2011, ended July 30, 2011, with the remaining costs being incurred in the first quarter of fiscal 2012.
About United Natural Foods
United Natural Foods, Inc. (www.unfi.com) carries and distributes more than 60,000 products to more than 23,000 customer locations throughout the United States and Canada. The Company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel. United Natural Foods, Inc. was ranked by Forbes in 2005 as one of the "Best Managed Companies in America," ranked by Fortune in 2006 – 2010 as one of its "Most Admired Companies," winner of the Supermarket News 2008 Sustainability Excellence Award, and recognized by the Nutrition Business Journal for its 2009 Environment and Sustainability Award.
About Safeway
Safeway Inc. is a Fortune 100 company and one of the largest food and drug retailers in North America, based on sales. The company operates 1,692 stores in the United States and western Canada and had annual sales of $41.1 billion in 2010. The company's common stock is traded on the New York Stock Exchange under the symbol SWY. For more information, visit www.safeway.com.
Source: United Natural Foods / Safeway
